FRANKFURT (Reuters) – Commerzbank’s chief executive was paid 32 percent less in 2018, contrasting with sharp rises for the top management at its potential merger partner Deutsche Bank.
FILE PHOTO: Martin Zielke, CEO of Germany’s Commerzbank addresses the media during the bank’s annual news conference in Frankfurt, Germany, February 14, 2019. REUTERS/Kai Pfaffenbach/File Photo
The disparity, revealed in Commerzbank’s annual report on Wednesday, underscores a divide in the compensation culture of the German banking rivals, which are in talks over a merger.
The disclosure on pay came as the chairman of Deutsche Bank’s supervisory board said a decision on whether to move forward with a merger was just weeks away, while Commerzbank employees voiced opposition to a possible deal.
Commerzbank CEO Martin Zielke’s total compensation for the year was 1.97 million euros ($2.22 million), down from 2.88 million euros in 2017, compared with 7 million euros for Deutsche Bank’s chief Christian Sewing.
And pay for Commerzbank’s management board dropped by 24 percent in 2018, while Deutsche Bank’s board received total pay, including bonuses, of 55.7 million euros, up from 29.8 million euros a year earlier.
Commerzbank, 15 percent owned by the government after a bailout a decade ago, focuses on individual retail customers and financing small-and-medium sized corporate clients. Deutsche Bank in contrast operates a sprawling global investment bank.
The drop in management pay at Commerzbank comes despite its net profit rising to 865 million euros from 128 million a year earlier, although it scaled back revenue targets.
Commerzbank’s annual profit was more than twice the 341 million euros earned by Deutsche Bank. Commerzbank’s bonus pool for the broader workforce declined 41 percent to 134 million euros from 229 million a year earlier.
Deutsche Bank and Commerzbank both declined to comment.
TOO SMALL TO SCALE?
Separately, Deutsche Bank supervisory board chairman Paul Achleitner said that the banks aim to announce more concrete steps on the merger by late April.
Achleitner, speaking at a conference in Liechtenstein, said that a merger makes great sense from a macroeconomic perspective, but that the banks were still studying the operational value.
“Our problem may not be too big to fail, but rather too small to scale,” Achleitner said. “Size matters.”
The prospect of a merger is facing heightened opposition from Commerzbank employees.
The bank’s workers’ council sent a letter to board members on Wednesday to protest the merger, saying the idea lacked support among workers, customers and society.
“We are of the opinion that you will fall into an uncontrollable adventure without a solid plan, without a vision and without support,” the letter said.
Reporting by Tom Sims, Hans Seidenstuecker and Arno Schuetze; Additional reporting by Angelika editing by Thomas Seythal, Kirsten Donovan and Alexander Smith